life insurance and endowments

hammy_the_hammer

i didn't want to cloud the previous issue i raised so i thought i'd post a new one.
a further complaint i raised with standard life which was rejected ( this only came to light when we proved my wife would retire before the mortgage ended ) was to do with life insurance. we informed standard life that a selling point of an endowment is the life insurance cover ...we pointed out that when we took out the endowment we were both in occupational pension schemes ( we are both still in the same schemes ) which would pay out a death benefit sum greater than our mortgage ..so in reality we didn't need the cover.
i find it quite bizarre that their only rejection of this complaint is based as follows .........."as you would lose any death in service benefits provided by your employers if you were to change occupation it was appropriate to recommend a plan that incorporated life assurance to ensure that your mortgage would be repaid should either of you die " ....now if that did happen surely i could have then took out lif cover .....the thing that really perplexes me with that response was that my complaint about the endowent running past my wifes retirement date is rejected because standard life make lots of future positive assumptions about our incomes in ten years time.
sorry for rambling but any feedback appreciated

dunstonh

Death in service is not considered to be an absolute certainty. You could change job, you could be dismissed, you could become ill and unable to work (and then not get replacement life cover), the death benefit could be removed or altered by the employer.

They could easily point out that the DIS is there for family protection and to help replace the loss of income, not to repay a mortgage. Particulary if you have children.

dander

Is not needing life insurance when you were sold an endowment considered proof of mis-selling then?

dunstonh

I wouldnt say so as an endowment is primarily a savings plan. It has life cover bolted on. When bought from a tied agent, the tied agent responsibility would be to sell the best product from their product range. If this was the endowment, then fair enough. If it was commenced in the days of regular savings PEPs/ISAs and no life cover was required, you could argue quite easily that these were better but it would only work if it was an IFA or the tied provider offered a regular savings PEP/ISA that was suitable for mortgages.

Arguing that alternative savings options were better and you should have gone with one of those could indicate that you were willing to accept the risk and that could invalidate your complaint if you went in with "didnt want risk" option.